Gov’t to Lenders: “Pay Up for Foreclosure Errors”

The nation’s largest banks reached a settlement with federal regulators, agreeing to compensate home owners who were wrongly foreclosed upon and to overhaul their operations.

The settlement also directed financial firms to hire auditors to determine if they improperly foreclosed on home owners in 2009 and 2010.

However, the settlement reached with federal regulators on Wednesday is hardly the end of punishment and investigation into banks’ shoddy lending practices and wrongful foreclosures, officials say. Officials warn fines will be determined later for the lenders and banking companies, which include Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup.

Wednesday’s settlement with banks was reached with three federal banking regulators: the Office of the Comptroller of the Currency, the Federal Reserve, and the Office of Thrift Supervision.

Full details at source: “14 Lenders and 2 Servicers to Reimburse Home Owners who Were Incorrectly Foreclosed Upon,” Associated Press (April 13, 2011) and “Mortgage Lenders Settle but Still Face Probe,” MSNBC.com (April 13, 2011) 

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